FIRST IBL MODARABA

Quarterly Report

March 31, 2017

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Table of Contents

1-

2- Directors’ Report (English & Urdu)

3- Balance Sheet

4- Profit & Loss Account

5- Statement of Comprehensive Income

6- Cash Flow Statement

7- Statement of Changes in Equity

8- Notes to the Accounts

Corporate Information 1

2-3

4

5

6

7

8

9-12

1

CORPORATE INFORMATION

MODARABA MANAGEMENT COMPANY

BOARD OF DIRECTORS

AUDITORS TO MODARABA

SHARIA’ AH ADVISOR

LEGAL ADVISOR

BANKERS

REGISTRAR

REGISTERED OFFICE

PRINCIPAL OFFICE

CHIEF OPERATING OFFICER

COMPANY SECRETARY

CHIEF FINANCIAL OFFICER

INTERNAL AUDITOR

AUDIT COMMITTEE

HR & R COMMITTEE

IBL Modaraba Management (Pvt.) Ltd.

Dr.Hasan Sohaib Murad Chairman & CEODirector

Arslan Khan Khakwani

Director

Director

Shaheen Rashid

Naveed Amin

Chairman

Member

Member

Secretary

Dr.Mufti Salman Ahmad Khan

M/s. Holscott International [Legal Services]

M/s. Horwath Hussain Chaudhury & Co.Chartered Accountants

Habib Bank Limited - Meezan Bank LimitedSilk Bank Limited - Islamic Banking

Islamic Banking

Corp Tec Associates (Pvt.) Ltd.503-E Johar Town Lahore.

stSuite # 105, 1 Floor, Fortune Center,45-A, Block # 6 , P.E.C.H.S.,Shahrah e Faisal, Karachi.

87-Aurangzaib, Block, New Garden Town, Lahore.

Naveed Amin

Shaheen RashidArslan Khan KhakwaniMuhammad Ilyas

Shiraz Butt

M. Sohail A. Sheikh

Zeeshan Ahmed

Husnain Shafqat

Chairman Member

Member

Secretary

Shaheen RashidArslan Khan KhakwaniNaveed Amin

Shiraz Butt

2

Directors’ Report

_____________________Dr. Hasan Sohaib MuradChairman / Chief Executive Officer

April 26, 2017

The Board of Directors of M/s IBL Modaraba Management (Private) Limited [IBLMM], the Management Company of First IBL Modaraba [FIBLM], is pleased to present the nine months and quarterly results of FIBLM for the period ended March 31, 2017along with directors’ report to its certificate holders.

During the nine month’s period ended March 31, 2017, FIBLM recorded net profit of Rs.11.135 million as compare to Rs. 11.673 million in the preceding period. During the quarter ended March 31, 2017 the net income increased to Rs. 10.272 million from 0.147 million in the corresponding quarter.

During the reporting period Rs. 16.763 million

were invested in ijarah segment which causes an increase of 17.38% in ijarah income and Rs. 107 million were invested in musharikah segment which resulted in

an

increase of 21.76% in musharikah income. Moreover, an increase of 25.2% against profit on deposits is also reported in the financial statements.

During the period FIBLM managed to recover Rs. 11 million out of its classified portfolio.

As of March 31, 2017, amount of Rs. 30 million under the head of short term investments which was previously invested in to term deposit receipt is invested in to musharakah / ijarah financing to enhance musharakah / ijarah income.

Current assets of FIBLM during the period increased by 15.08%. Whereas total assets were maintained at Rs. 231.70 million as compare to Rs. 224.26 million reported in audited financial statements for the period ended June 30, 2016.

To enhance the equity base of FIBLM, Rs. 5 million are received which are reported under the head of “short term borrowing”. Further, close co-ordination with various national and international stake holders is in progress in this regards.

FIBLM managed to repay Rs. 3 million against its musharikah financing and it is projected to pay off entire balance outstanding by the end of financial year.

Acknowledgment:

FIBLM, has witnessed significantly challenging times in the last few years. However, by having a clear vision of the board and the team of senior management to accelerate its operations for achieving better profitability, FIBLM succeeded to

accomplish good financial results.

The Board of Directors extends

its sincere gratitude to its valued certificate holders and customers for their interest and the confidence that they reproduced for bett erment of Modaraba. The board is thankful to Registrar Modarabas, Securities & Exchange Commission of Pakistan (SECP), State Bank of Pakistan (SBP), Pakistan Stock Exchange Limited (PSX) & NBFI & Modaraba Association of Pakistan for their kind guidance and continuous support.

The Board also appreciates

its team for their sincere and professional efforts to achieve all set targets for growth of the modaraba.

For & On behalf ofthe Board of Directors:

3

BALANCE SHEET

AS AT MARCH 31, 2017 (UN-AUDIETD)

Note

March

2017

June

2016

Rupees Rupees

4

CHIEF EXECUTIVE DIRECTOR DIRECTOR

ASSETS

Current Assets

Bank balancesIjarah rentals receivableAdvances, prepayments and other receivablesShort term investmentsMusharaka receivablesCurrent portion of murabaha receivable

Non-Current AssetsLong term advances and depositsInvestment propertyFixed assets under ijarah arrangementsFixed assets under own useIntangible asset

Total Assets

LIABILITIESCurrent LiabilitiesCreditors, accrued and other liabilitiesShort term borrowingMusharaka profit payableMusharaka financesCurrent portion of non-current liabilitiesUnpresented profit warrants

Non-Current LiabilitiesLong term security deposits

Total LiabilitiesNET ASSETS

REPRESENTED BY:Certificate capitalReservesAccumulated lossContingencies and commitments

The annexed notes form an integral part of these financial statements.

25,625,370 20,702,4183 519,365 988,8224 10,578,264 12,338,171

5 9,105,278

36,183,629

72,671,937

14,410,895

-

18,340,882

118,500,214

102,964,817

2,709,260

2,709,260

6 78,333,692

82,083,713

7 31,477,854

35,643,826

8 660,645

780,032

20,842

83,338

113,202,293

121,300,169

231,702,507

224,264,986

3,852,088

5,195,330

15,000,000

10,000,000

1,430,192 1,430,192

1,200,000 4,200,000 5,609,170 5,078,443 9,373,597 9,481,834

36,465,048

35,385,799

9,666,070

10,047,035

9,666,070

10,047,035

46,131,118

45,432,834

185,571,388

178,832,152

9 201,875,000

201,875,000

49,375,636

46,686,272

(65,679,248)

(69,729,120)

10 - -185,571,388 178,832,152

5

CHIEF EXECUTIVE DIRECTOR DIRECTOR

March 31, 2016 March 31, 2016

INCOME FROM OPERATIONS

Income from ijarah 3,234,723

3,670,638

11,250,986

9,584,789

Profit on murabaha investment -

626,501

-

2,254,333

Profit on musharaka investments 2,222,556

731,088

3,573,171

2,934,425

Income from investment property 1,873,860

1,873,860

5,621,580

5,621,580

Profit on deposits 143,674

656,086

1,423,573

1,136,965

Income from short term investments -

-

335,944

3,954,261

7,474,813

7,558,173

22,205,254

25,486,353

OTHER INCOME

Reversal of provision against non-performing musharakah receivable 8,500,000

-

10,246,548

10,000,000

Reversal of musharaka profit held in suspense account 2,500,000 - 2,992,561 -

Other income 207,086

12,411

2,202,336

49,359

11,207,086

12,411

15,441,445

10,049,359

TOTAL INCOME 18,681,899

7,570,584

37,646,699

35,535,712

EXPENSES

Operating expenses (5,516,767)

(4,726,937)

(17,679,082)

(15,949,421)

Depreciation on assets under ijarah (2,354,817)

(2,654,015)

(8,666,278)

(7,759,849)

Other operating expenses (537,704)

(41,902)

(165,650)

(153,200)

(8,409,289)

(7,422,854)

(26,511,010)

(23,862,470)

Profit before Tax 10,272,610

147,730

11,135,688

11,673,242

Taxation - - - -

Net Profit for the Period 10,272,610 147,730 11,135,688 11,673,242

Profit per Modaraba Certificate - Basic and Diluted 0.509 0.007 0.552 0.578

The annexed notes form an integral part of these condensed interim financial information (un-audited).

CONDENSED INTERIM PROFIT & LOSS ACCOUNT (UN-AUDITED)

FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2017

"Rupees"

Quarter ended Nine months ended

March 31, 2017 March 31, 2017

6

CHIEF EXECUTIVE DIRECTOR DIRECTOR

Net Profit/ (Loss) for the Period 11,135,688 11,673,242 10,272,610 147,730

Other comprehensive income

Items that may be reclassified subsequently to profit and loss

Net unrealized gain / (loss) in value of available for sale investments 2,689,365

2,112,341

541,808

865,969

Gain realized on disposal short term investments

classified as 'available for sale' -

(3,935,320)

-

-

2,689,365

(1,822,979)

541,808

865,969

Total Comprehensive Income for the Period 13,825,053 9,850,263 10,814,418 1,013,699

The annexed notes form an integral part of these condensed interim financial information (un-audited).

CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME (UN-AUDIETD)FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2017

"Rupees" March 31, 2016 March 31, 2017

Nine months endedMarch 31, 2016 March 31, 2017

Quarter Ended

7

CHIEF EXECUTIVE DIRECTOR DIRECTOR

Nine months ended Year Ended March 31, 2017 June 30, 2016

Rupees Rupees

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 11,135,688 9,839,731

Adjustments for:

- Depreciation on fixed assets under own use 365,937 507,555

- Depreciation on investment properties 3,750,021

5,000,023

- Depreciation on fixed assets under ijarah arrangements 8,666,278

10,828,700

- Amortization on intangible assets 62,496

83,329

- Balances written off -

157,703

- Reversal of provision in respect of Musharaka facilities (13,239,109)

(9,854,514)

- Revaluation loss / (gain) on investment at fair value through profit or loss (232,285)

27,027

- Gain on disposal of short term investments available for sale -

(6,368,498)

- Gain on termination of ijarah arrangements (540,217)

(1,949)

- Profit on bank deposits (1,423,573)

(1,542,139)

- Dividend income (103,659)

(65,557)

(2,694,111)

(1,228,320)

Operating profit before working capital changes 8,441,578

8,611,411

(Increase) / Decrease in operating assets and liabilities

Advances, prepayments and other receivables 1,877,821

1,297,318

Ijarah rentals receivable 469,457

(463,807)

Musharaka receivables (48,014,494)

11,943,244

Murabaha receivable 18,340,882

1,611,906

Long term security deposits - ijarah 149,762

2,714,690

Short term borrowing 5,000,000 10,000,000 Creditors, accrued and other liabilities (1,343,242) 1,585,303

Net changes in working capital (23,519,814)

28,688,654

Cash generated from operations (15,078,236)

37,300,065

Income taxes paid (114,913)

(157,296)

Dividend income received 103,659

65,557

Profit received on bank deposits 1,423,573

1,542,139

Net Cash generated from Operating Activities (13,665,917)

38,750,465

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets under ijarah arrangements (16,763,100)

(16,131,330)

Purchase of fixed assets under own use (246,550)

(11,000)

Proceeds from disposal of assets on terminating ijarahs 15,792,569

1,548,572

Short term investments - net 30,000,000

(21,064,680)

Long term loans and deposits -

Net Cash used in Investing Activities 28,782,919

(35,658,438)

CASH FLOW FROM FINANCING ACTIVITIES

Musharaka finances (3,000,000) (4,000,000)

Dividends paid (7,194,050) (2,966,461)

Net Cash used in Financing Activities (10,194,050) (6,966,461)

Net (Decrease) in Cash and Cash Equivalents 4,922,952 (3,874,434)

Cash and cash equivalents at the beginning of the period 20,702,418 24,576,852

Cash and Cash Equivalents at the end of the Period 25,625,370 20,702,418

The annexed notes form an integral part of these condensed interim financial information (un-audited).

CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDIETD)

FOR THE PERIOD ENDED MARCH 31, 2017

8

CHIEF EXECUTIVE DIRECTOR DIRECTOR

Balance as at June 30, 2015 201,875,000 39,090,402 8,722,641 47,813,043 (73,563,405) 176,124,638

Comprehensive income for the year

Net profit for the year - - - 9,839,731 9,839,731

Other comprehensive income for the year - - (3,094,717) (3,094,717) - (3,094,717)

Total comprehensive income for the year - - (3,094,717) (3,094,717) 9,839,731 6,745,014

Transferred to statutory reserve - 1,967,946 - 1,967,946 (1,967,946) -

Transactions with owners

Profit distributed for the year ended

June 30, 2015 - - - - (4,037,500) (4,037,500)

Balance as at June 30, 2016 201,875,000 41,058,348 5,627,924 46,686,272 (69,729,120) 178,832,152

Comprehensive income for the period

Net profit for the period - - - 11,135,688 11,135,688

Other comprehensive loss for the period - - 2,689,365 2,689,365 - 2,689,365

Total comprehensive income for the year - - 2,689,365 2,689,365 11,135,688 13,825,053

Transactions with owners

Profit distributed for the year ended

June 30, 2016 - - - - (7,085,813) (7,085,817)

Balance as at March 31, 2017 201,875,000 41,058,348 8,317,289 49,375,636 (65,679,248) 185,571,388

Particulars

Certificate

CapitalTotal Equity

Reserves

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (UN-AUDIETD)FOR THE PERIOD ENDED MARCH 31, 2017

Statutory

reserve

Unrealized gain

on revaluation

of available for

sale

investments

Rupees

The annexed notes form an integral part of these financial statements.

Subtotal

Accumulated

loss

9

Note 1

Note 2

Note 3

Ijarah Rentals Receivable

March 31, June 30,

2017 2016

(Un-audited) (Audited)

Note

Considered good 519,365

988,822

Considered doubtful 3.1 10,152,800

9,525,449

10,672,165

10,514,271

Accumulated impairment (10,152,800)

(9,525,449)

519,365

988,822

3.1

3.2

As at the beginning of the period / year 9,525,449

8,771,008

Recognized during the period / year 647,351

1,211,524

Reversed during the period / year (20,000)

(457,083)

As at end of the period / year 10,152,800

9,525,449

Note 4

Advances, Prepayments and Other Receivables

Advance income tax 1,033,497

918,583

Advance to employees (Unsecured - Considered good) 621,199

802,175

Prepayments 927,307

560,554

2,582,003 2,281,312

Accrued profit:

- Profit receivable on musharaka receivables 11,404,703 13,663,968

- Less: Profit held in suspense account (10,509,539) (13,502,100)

895,164 161,868 Accrued profit on murabaha receivable - 1,295,548 Accrued profit on modaraba certificate and bank deposits - 118,751 Other receivables: - Others 7,101,097 8,480,692

7,101,097 8,480,692 10,578,264

12,338,171Note 5

Short Term Investment

Available for sale 5.1 8,317,331

5,627,967 At fair value through profit or loss 5.2 787,947

555,663

Investments in Term Deposit Receipts- Held to Maturity -

30,000,000

9,105,278 36,183,6305.1 Available for sale

(Un-audited) (Audited)

March 31, June 30, Name of entity

2017 2016

No. of shares/ Certificates

Holdings are in ordinary certificates / shares of Rupees 10 each.

11,966

10,497

The Searle Company Limited 8,317,331

5,627,967

11,966

10,497

8,317,331

5,627,967

5.2 At fair value through profit or loss

(Un-audited) (Audited)

March 31, June 30, Name of entity

2017 2016No. of shares/ Certificates Holdings are in ordinary certificates / shares of Rupees 10 each.

200

200

Attock Refinery Limited 89,762

27,635

100,000

100,000

First Punjab Modaraba 670,000

472,000

200

174

IBL Healthcare 28,185

56,028

100,400

100,374

787,947

555,663

"Rupees"

This represent rentals receivable against assets leased out under ijarah arrangements.

Movement in accumulated impairment is as follows:

NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE NINE MONTHS PERIOD ENDED MARCH 31, 2017

The accounting policies adopted for the preparation of these financial statements are consistent with those

applied for the preparation of preceding annual publishing accounts.

These unaudited financial statements have been prepared and circulated under the directives of Securities and

Exchange Commission of Pakistan.

10

Note 6

Investment Property

Cost Note

Opening balance 100,000,465 100,000,465 Additions - - Closing balance 100,000,465 100,000,465

Accumulated Depreciation

Opening balance (17,916,752) (12,916,729)Charged during the period / year 6.1 (3,750,021) (5,000,023)Closing balance (21,666,773) (17,916,752)

78,333,692 82,083,713

6.1 The Modaraba depreciates its investment property on straight line basis @ 5% per annum.

Note 7

Fixed Assets Under Ijarah Arrangements

Written down value at the beginning of the period / year 35,643,826

31,887,819

Additions at cost 16,763,100

16,131,330

Less: Written down value of assets disposed off (12,262,794)

(1,546,623)

40,144,132

46,472,526

Less: Depreciation charged during the period / year (8,666,278)

(10,828,700)

31,477,854

35,643,826

Note 8

Fixed Assets Under Own Use

Written down value at the beginning of the period / year 780,032

1,276,587

Additions at cost 246,550

11,000

Less: Written down value of assets disposed off -

-

1,026,582

1,287,587

Less: Depreciation charged during the period / year (365,937)

(507,555)

660,645 780,032

Note 9

Certificate Capital

March 31, June 30,

2017 2016

(Un-audited) (Audited)

March 31, June 30,

2017 2016

(Un-audited) (Audited)

Rupees Rupees

Authorized:

50,000,000 Modaraba Certificates of Rs. 10 each 500,000,000 500,000,000

Issued, subscribed and paid-up:

18,500,000

18,500,000

Modaraba Certificates of Rs. 10 each

issued as fully paid in cash 185,000,000 185,000,000

1,687,500

1,687,500

Modaraba Certificates of Rs. 10 each

issued as fully paid bonus 16,875,000 16,875,000

20,187,500 20,187,500 201,875,000 201,875,000

9.1

9.2

9.3

9.4

Note 10

Contingencies and Commitments

10.1 Contingencies

There were no known contingencies as at March 31, 2017 (June 30, 2016: Nil).

10.2 Commitments

The Modaraba has not made any capital commitments as at March 31, 2017 (June 30, 2016 : Nil).

There was no movement in certificate capital during the period.

IBL Modaraba Management (Private) Limited (the Management Company) holds 2,030,905 (June 30,

2016: 2,030,905) certificates of Rs. 10 each.

University of Management and Technology (associated undertaking) holds 3,070,000 (June 30, 2016:

3,070,000) certificates of Rs. 10 each.

One of the Director of the Management Company holds 1,515,820 (June 30, 2016: 1,515,820) certificates

of Rs. 10 each.

50,000,000

11

Note 11

RELATED PARTY TRANSACTIONS

Relationship March 31, 2017 March 31, 2016

IBL Modaraba Management (Private) Limited

Management fee paid during the period Management

Company1,093,303 592,036

University of Management and Technology

Rent of Library Building received

Holds 15.2% of

the paid up

certificates of

Modaraba

5,621,580

5,621,580

Short Term Borrowing Director 5,000,000

-

March 31, 2017 March 31, 2016

Outstanding Balance:Short term borrowing 15,000,000 -

Detail of breakup of transactions with related parties and balances with them as at nine months period ended were as follows:

The related parties of the Modaraba comprise of its Management Company, major certificate holders of the Modaraba and

their close family members, directors of the management company and their close family members and entities with

common directors or under common management.

Transactions during the period

Note 12

Segment Analysis

12.1 Geographical segments

The Modaraba's assets are employed and its income is derived in Pakistan.

12.2 Business segments

Murabaha receivable

Rupees % Rupees %

Chemicals -

100.0

19,636,430

100.0

Musharaka receivableMedia advertising 43,509,599

59.9

12,394,453

85.1

Education 537,186

0.7

2,178,310

14.9

Construction 22,500,000

31.0

-

Individuals 6,125,153 8.4 - - 72,671,937 100 14,572,763 100

Ijarah receivableMedical and pharmaceuticals 231,120

44.5

231,680

23.4

Individuals 257,545

49.6

361,172

36.5

Others 30,700

5.9

-

-

Textile -

-

395,970

40.0

519,365

100.0

988,822

100.0

Investment in ijarah under (IFAS-2)

Individuals 20,768,833

66.0

21,677,112

60.8

Textile 262,500

0.8

5,207,209

14.6

Medical and pharmaceuticals 1,512,159

4.8

2,349,346

6.6

Media advertising 2,973,813 9.4 4,437,193 12.4

Leasing 283,906 0.9 283,906 0.8

Hotel 120,000 0.4 120,000 0.3

Engineering 60,000 0.2 60,000 0.2

Others 5,496,643 17.5 1,509,060 4.231,477,854 100 35,643,826 100

March 31, 2017 June 30, 2016

12

Note 13Date of Authorization for Issue

These financial statements were authorized for issue on April 26, 2017by the Board of Directors of IBL ModarabaManagement (Private) Limited (the Management Company).

Note 14General

Corresponding figures have been rearranged, wherever necessary during the period. No material rearrangements

were made in these financial statements.

CHIEF EXECUTIVE DIRECTOR DIRECTOR

BB

TRADING COMPANY

0322 333 3356

stSuite # 105, 1 Floor, Fortune Center. 45-A,Block # 6, P.E.C.H.S., Shahrah-e-Faisal, Karachi.Tel: +92 21 3432 8610Fax: +92 21 3432 8611Web: www.firstibl.com

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